Israeli prime minister Ehud Olmert’s main coalition partner has demanded that
he leave office over corruption allegations, in a political turmoil that
threatens to topple his government and disrupt peace talks with the
Palestinians.

Ehud Barak (r) has called for the prime minister (l) to resign after he was accused of pocketing up to £100,000 while running for mayor

By Carolynne Wheeler in Jerusalem

3:57PM BST 28 May 2008

Ehud Barak, the defence minister and leader of the Labour party, said Mr Olmert should leave office, a day after one of his former associates told a court he pocketed tens of thousands of dollars in cash while running for mayor of Jerusalem.

“I do not think that the prime minister can simultaneously manage the government, and handle his personal issues,” said Mr Barak.

He said Mr Olmert could choose to suspend himself temporarily or resign but the result must be the same.

Mr Barak’s threat to pull Labour from the ruling coalition with Mr Olmert’s Kadima party could set the scene for new elections.

The opposition Likud party, headed by Benjamin Netanyahu and opposed to current peace talks with the Palestinians, leads polls in Israel.

“If Kadima cannot establish a government in this Knesset that is to our liking, we will act to set an agreed upon, specific date for early elections,” Mr Barak said.

His call came a day after Jewish-American businessman, Morris Talansky, alleged Mr Olmert accepted nearly £100,000 - much of it in cash stuffed envelopes.

The call for Mr Olmert to step aside has spread to his own party, with at least two junior members saying he should excuse himself at least until the investigation is complete.

But an adviser to Mr Olmert, Tal Silberstein, told Israel’s Army Radio today that the prime minister had no intention of stepping aside.

“I can tell you, based on a recent conversation with him, that he has no intention of announcing that he is taking a leave of absence or declaring anything at this stage - not as long as he is trying to prove his innocence,” Mr Silberstein said.

At stake in the political crisis is the fate of peace talks with the Palestinian Authority.

Mr Netanyahu, a former prime minister, has said he would cease the present talks on the creation of a Palestinian state and focus instead on economic development in Palestinian areas adjacent to Israel.

Israel has also confirmed it has entered into indirect peace negotiations with arch-enemy Syria via Turkish intermediaries, and is said to be making progress in a prisoner swap with Lebanese militant group Hizbollah for the release of two soldiers captured on Israel’s northern border nearly two years ago. Those efforts, too, would almost certainly be sidelined if early elections were called.

Should Mr Olmert step aside, his foreign minister and chief negotiator with the Palestinians, Tzipi Livni has been touted as a likely successor as Kadima leader. A charismatic former spy, Miss Livni failed in attempts to pressure Mr Olmert into resigning following the 2006 war.

Mr Olmert’s political woes have captivated the Israeli public, which is already well-used to corrupt politicians.

A survey conducted Tuesday night, following the shocking testimony of the American businessman, showed 70 per cent did not believe Mr Olmert when he said the cash transfers were purely for his election campaigns.

The former president, Moshe Katsav, is expected to face trial on sex-crimes charges after resigning in disgrace last year; the present vice-premier, Haim Ramon, resigned a previous cabinet post after his conviction for indecent assault against a female soldier.

Mr Netanyahu, who a decade ago had an investigation on corruption allegations dropped, also endured a political storm earlier this year over an expensive diplomatic trip to London made two years ago which was largely paid for by a UK Jewish group.